The Canadian economy is expected to recover this year with growth of 1.5%. This forecast, along with a stable inflation rate of 1.8% and a dollar that will rise slightly to US65¢, bodes for better times ahead according to leading economists and market analysts who took part in the 21st Annual Economic Expectations Survey, released today by Watson Wyatt.

The survey involved 42 of the country’s top economists and financial market forecasters from major financial institutions, investment firms and other organizations.

According to the survey, the experts predict a general strengthening of the economy, but nothing to match the growth rates of a few years ago. They say that for the long term (five to 15 years), economic growth should level off at 3%, inflation will climb to 2.3%, and the dollar will nudge up to US70¢, which is down from last year’s long-term forecast of US75¢..

Survey participants also expect the unemployment rate to jump to 7.8% this year, before dropping to 7% over the medium term and 6.8% over the long term, which is higher than the 6.5% long-term forecast from one year ago. As well, they predict a federal budget surplus of $2 billion in 2002, rising to $3 billion over the longer term.

“According to our survey, the experts are quite optimistic overall,” says Jan Grude, Watson Wyatt’s National Director, Human Capital Group. “But it’s a qualified optimism as we climb out from under the current economic malaise. Organizations should have certain practices in place so they can continue to achieve shareholder value even in the face of economic uncertainty. Now is the time when good effective leadership, a focus on core business practices, and effective human capital strategies will go a long way in mitigating any negative economic impact.”